I know it's a bad idea to ask for financial advice here, but I don't care.
Haven't done the TFSA yet and thought of going with FNB to make life a bit easier for now for ebucks level. Any thoughts on the TFSA products that FNB offers. Any comments appreciated for example returns, fees etc.
Noticed they have 3 categories:
Cash deposit
Shares
Unit Trusts
Totally agree with what
@zerocool2009 and
@mr_norris said.
To add, I had my tfsa with fnb until treasury allowed transfers, only the first year's contribution (because I procrastinated to the last minute that tax year and FNB opens it instantly on the app verses waiting for FICA and hoping funds reflect in the receiving account in time after FICA with a broker). I regretted it but it served its purpose since I didn't want to lose that year's allocation while getting my stuff together. My experiences: (I had the share account)
1. Those monthly account fees started getting really annoying, especially once I opened my EE TFSA and saw that I could have the exact same investments without those charges. It wasn't a monumental amount, but seeing the transaction every month in 22seven was enough to put me off.
2. Don't know if it's changed now but their methodology for investing your TFSA used to be baffling. They invested in cheap Ashburton ETFs (good) but there were only two options and you couldn't customize (bad). It was ASHT40 and ASHMID so the top 100 JSE SA Inc shares. Great if that's what you're going for but there's no flexibility if you're not, like if you're looking to diversify geographically.
3. Linked to the above, they just buy a 50:50 of ASHT40:ASHMID. So it's never really predictable, whatever is happening you'll always get as many of one as you will of the other (quantity wise, not rand wise). That's too much midcap for my liking but ymmv.
4. Lastly but most important to me: FNB makes you
disinvest to transfer to another provider. After waiting for years for treasury to allow transfers, FNB found a way to punish anyone who wants to transfer without actually breaking the law by levying a penalty. If you want to transfer your TFSA, FNB makes you sell all your units and sit in cash for the week(s) it takes them to do some paperwork. I'm serious. They refuse to transfer your shares/ETFs/Equities like normal people. Staying invested is key for anyone with a long term outlook, some of the biggest gains (and losses) that determine a portfolio's success happen over a few random days that nobody can preselect. On principle I don't invest with institutions that levy penalties that weren't disclosed upfront. And be sure, making you move to cash is a penalty. They keep that cash in the tax free wrapper at least, but what good is cash earning almost no interest in an account meant for long term investing?
So that's just a few pointers from my experience. Use banks for banking and then run for the hills. The TFSA simply wasn't worth it for me, and I haven't even touched on the actual cost of investing itself (the ETFs are cheap, buying them not so much).
Good luck!
